Candidly, its on life support, John Ford said. To continue the project would require renegotiating labor contracts. And, with the way that labor rates for that region have increased, it would be prohibitively expensive.

In the works for years, Sweetwater was planned as a plant that would turn stranded natural gas into 11,500 barrels per day of gas-to-liquid specialty products, half of it lubricating base oil. GTL base stocks have generated a great deal of anticipation in the lubes industry because they are expected to perform comparably to Group III mineral base oils and polyalphaolefins but to cost significantly less to produce.

GTL technologies have existed for decades but aside from Shell Oils trouble-plagued middle distillate plant in Bintulu, Malaysia, a commercial plant has never been built because they cost significantly more than traditional oil refining. Many observers agree, however, that the time for GTL is approaching as tightening pollution restrictions drive up costs for diesel fuel. Experts predict that more GTL fuel refineries will be built before the end of the decade and that some of them will produce base stocks.

Still, no project was farther along than the Sweetwater specialties project. Syntroleum had obtained site permits, secured gas and water supplies and obtained virtually all project development contracts. Funding was the only remaining significant hurdle. For two years the company has sought but failed to obtain equity and debtor financing to cover the estimated $600 million price tag. Enron signed up for a 13-percent interest before filing for bankruptcy late last year. Ivanhoe Energy said it would make an equal investment but bowed out due to delays and escalating costs.

First we lost our equity investor, then you had 9/11 and the stock markets took a beating, Ford said. It seemed like the gods were lined up against us.

Now that its engineering and construction contract with the German firm RWE Solutions AG has expired, Syntroleum will take a third-quarter write-down of $25 million to $30 million. The company will continue seeking financing for the next couple months.

After that, well have to look at indefinitely suspending the project, Ford said.

Syntroleum said it will now focus on several other projects that are already in the works, including potential development of a 185,000 b/d GTL fuels plant in Qatar and construction of a demonstration GTL plant near Tulsa to supply clean fuels to federal vehicles. Ford said these and other projects have smaller price tags than Sweetwater because their reactors are based on moving-bed catalyst systems. Sweetwaters reactor would have used a more intricate fixed-bed catalyst system.